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CIRCULAR No

CIRCULAR No. 05/1998/TT-TCHQ OF AUGUST 29, 1998 GUIDING THE IMPLEMENTATION OF DECREE No. 16-CP OF MARCH 20, 1996 AND DECREE No. 54/1998/ND-CP OF JULY 21, 1998 OF THE GOVERNMENT ON SANCTIONING ADMINISTRATIVE VIOLATIONS IN THE FIELD OF STATE MANAGEMENT OF CUSTOMS

Pursuant to Clause 2, Article 35 of Decree No. 16-CP of March 20, 1996 and Article 7 of Decree No. 54/1998/ND-CP of July 21, 1998 of the Government on sanctioning administrative violations in the field of State management of customs, the General Department of Customs provides the following guidances:

I. GENERAL PROVISIONS

1. The sanctioning of administrative violations in the field of State management of customs must be based on Decree No. 16-CP on sanctioning administrative violations in the field of State management of customs (effective Articles) and Decree No. 54/1998/ND-CP amending and supplementing a number of Articles of Decree No. 16-CP (hereafter called Decree on sanctioning administrative violations in the field of State management of customs).

2. Administrative violations in the field of State management of customs are acts intentionally or unintentionally committed by individuals and/or organizations, infringing upon the regulations on State management of customs but not to the extent of being examined for penal liability, which, as prescribed by law, must be subject to sanctions against administrative violations in customs.

3. Individuals and organizations stipulated in Clause 2 of Article 1 are understood as follows:

a/ Organizations shall include: State agencies, economic organizations and social organizations prescribed by Vietnamese law;

b/ Individuals shall include: Vietnamese nationals and foreigners, and persons without citizenship but with full capacity of action as prescribed by Vietnamese law;

c/ Vietnamese and foreign organizations and/or individuals that commit acts of violation of the regulations on State management of customs shall have to take administrative responsibility in customs in accordance with the provisions of the Decree on sanctioning administrative violations in the field of State management of customs (Decree for short) and other Government Decrees defining the sanctioning competence of the customs agencies, except otherwise provided for by international agreements which Vietnam has signed or acceded to.

4. Subject to the sanctions against administrative violations in the field of State management of customs are: transporters, goods consignors, goods receivers or their lawful representatives or bonded-warehouse businessmen, who commit acts of customs-related administrative violation; persons who buy, sell, store and/or transport goods and/or articles which are illegal imports and/or exports; goods purchasers or sellers who fail to comply with the regulations on goods entitled to preferential customs duties; and persons who commit acts of hindering or offending customs personnel on duty.

5. An act of administrative violation shall be sanctioned only once. If more than one persons are involved in an administrative violation, each person shall be sanctioned. If a person commit more than one acts of administrative violation, he/she shall be sanctioned for each of such acts. When a decision on fines is imposed on a person who at one time commits more than one acts of administrative violation, the fines shall be incorporated together into a common fine but the fine for each act must be clearly stated. If such an act falls outside the sanctioning competence of an authority, the entire related dossier and material evidences shall be transferred to the competent sanctioning level.

6. For complicated violations which are difficult to be determined as administrative or criminal, the competent person shall consult the people�s procuracy of the same level and at the same time send a report thereon to the General Department of Customs; he/she shall issue a decision on sanctioning an administrative violation only after obtaining the consent of the people�s procuracy.

7. For import-export goods and/or articles which are material evidences of administrative violations and taxable, the offending individual and/or organization shall, in addition to fines, have to fully pay import/export taxes, other taxes and customs fees as prescribed by law.

8. For customs-related administrative violations defined in the Decree which coincide with the administrative violations stipulated later in other Decrees, where the customs� sanctioning competence is specified, the sanctioning shall be effected under the provisions of the latest legal document.

Where a new legal document with the same legal validity as the old one stipulates a lesser legal responsibility for an administrative violation in customs that has happened before the effective date of the new document, the new document shall apply.

9. a/ For administrative violations that come under the sanctioning competence of more than one agencies, the agency that detects the violation and records it in writing first shall be the agency to issue the sanctioning decision;

b/ For acts of evading import and/or export taxes that are not serious enough to be examined for penal liability as prescribed in Circular No.06/TTLN of September 20, 1996 of the Supreme People�s Procuracy, the Supreme People�s Court and the Ministry of the Interior and are detected by other agencies without sanctioning competence, the relevant dossiers and material evidences shall be transferred to the customs agencies so that the latter may issue sanctioning decisions in accordance with the Law on Import Tax and Export Tax;

c/ For violations of customs legislation serious enough to be examined for penal liability but which fall outside the competence of the customs agencies, when the relevant dossiers are transferred to the legal proceedings agency, they must be attached with material evidences for preservation by that agency in accordance with provisions of Clause 2, Article 57 of the Criminal Procedure Code, except for specific cases to be decided by the Prime Minister;

d/ For administrative violations with dossiers related to more than one customs agencies, the sanctioning decision shall be issued by the agency that first detects the violation and records it in writing; the relevant agencies shall transfer all necessary documents to the competent sanctioning agency at the latter�s request; if opinions on the sanctioning vary, they must be reported to the General Director of Customs for decision within the prescribed time-limit.

10. When administrative violations in customs are found to have been committed by Export Processing Zone (IZ) and/or Industrial Park (IP) enterprises, they shall, depending on their nature and seriousness, be subject to the corresponding fine levels as provided for in the Decree on sanctioning administrative violations in customs as well as other Decrees where acts of violation and sanctioning competence of customs agencies are specified.

11. Cases exempt from administrative sanctions: Goods, articles or transport means brought into Vietnam which are damaged by fire, natural calamities, sabotage, unexpected accidents or other emergencies and which have been declared to the customs agency, other competent agencies or the local administration in strict compliance with the provisions of law shall not be subject to administrative sanctions. Failure to make customs declarations shall be sanctioned under the provisions of Point a, Clause 2, Article 6 of the Decree.

12. In this Circular, the following terms shall be construed as follows:

a/ "Goods and articles" are goods, luggage, mails, packages, foreign exchange, Vietnamese currency and other objects.

b/ "Commodity codes" are tax codes prescribed by the legislation on import tax and export tax.

c/ "Goods encouraged for import or export" are goods of which the import or export is not regulated by quotas, permits or orientation plan.

d/ "Average level of a fine frame" is the average of the first and last fines set for an administrative violation.

e/ "Customs declaration difference" is the difference between goods and articles declared and the customs and goods and articles actually imported or exported.

f/ "Recidivism" is the repetition of an administrative violation in customs within 1 year after a decision sanctioning a similar administrative violation is issued or within the effective time for the implementation of such a decision.

g/ "Multiple violation" is an administrative violation in customs which is committed for many times by one subject in the field of customs within 1 year after the latest act of violation is detected.

h/ "Illegally bringing goods into Vietnam" is to bring goods into Vietnam in contravention with the provisions of Vietnamese law.

13. When receiving customs dossiers for the clearance of import-export procedures for goods and articles, the receivers- customs officers shall have to examine the dossiers and, if they find them incomplete, shall guide the declarers to supplement the necessary documents and shall not record the violation in writing.

II. APPLICATION OF SANCTION FORMS AND LEVELS

1. Forms of sanction: Organizations and/or individuals that commit acts of administrative violation in customs shall be subject to one of the following forms of administrative sanction: warning or fine.

a/ Warning: shall apply to individuals and/or organizations that commit minor administrative violations for the first time and with extenuating factors, as stipulated in Clause 1 of Articles 6, 8, 9a, 9b, 11 and Article 10 of the Decree.

b/ In addition to the main sanction, depending on the nature and seriousness of their violations, organizations and/or individuals may also be subject to the following forms of additional sanction:

- Confiscation of material evidences and means of violation;

- Deprivation of the right to use permits.

The above-said forms of additional sanction shall not be applied independently but in association with the main sanction.

2. Individuals and/or organizations subject to the above-said main and/or additional sanctions may also be subject to administrative measures as provided for in the Decree, including:

- Forcible re-export of goods and/or articles;

- Suspension of the filling of customs procedures;

- Forcible destruction of goods and/or articles.

The administrative measures shall be applied together with main sanctions, not independently.

3. The form of additional sanction as deprivation of the right to use permits shall apply only to those permits which are directly related to the goods, articles and/or transport means which are material evidences of violation.

Customs agencies of different levels with sanctioning competence shall only be entitled to deprive the right to use those permits which have been granted by such customs agencies themselves. For permits granted by other agencies, the customs agencies shall notify in writing the permit-issuing agencies of the matters, requesting the latter to deprive the right to use those permits; after satisfying a customs agency�s request, the concerned permit-issuing agency shall have to inform the customs agency of the result.

If it is found that a permit has been falsified, granted ultra vires or its contents are contrary to law, the finding must be recorded in writing for the confiscation of the permit and written notices thereon must be sent to the concerned State agencies and/or organizations.

4. The time-limits for the clearance of customs procedures mentioned in Clause 1 and the time of arrival of the transport means mentioned in Point a, Clause 2 of Article 6 are the time-limits defined in Clause 1, Article 3 of the detailed regulation on customs procedures and customs fees, issued together with Decree No.171/HDBT of May 27, 1991;

5. For the provisions of Point b, Clause 2, Article 6 of the Decree, the sanctioning shall be effected only when the permit, the customs declaration, the decision on sanctioning administrative violation or other papers prescribed by law specify the time for re-import or re-export.

6. For the provisions of Clause 1, Article 7, the sanctioning shall be effected only when the person(s) assigned to preserve the customs seals commits act(s) of administrative violation.

7. For acts of violation of the provisions in Clause 3, Article 7, if the offender consumes without authorization goods and/or articles which are material evidences of other administrative violation(s) which are subject to the form of additional sanction of confiscation into the public fund, such offender shall not only be sanctioned as stipulated in Clause 3 of Article 7 but also have to return all goods and/or article sales according to the actual selling prices. If it is necessary to ensure the implementation of the sanctioning decision, the sum of money to be recovered shall be equal to the fine payable by the offender.

8. Subjects of "violations of the regulations on import-export goods exchange among border population" shall include people residing within and outside the border areas. The value and goods items that the border population are allowed to exchange shall have to comply with the current provisions of law; if it is otherwise provided for by international agreements on goods exchange by border population, such international agreements shall apply.

Others forms of goods and/or articles import or import at land border gates shall have to fully comply with the provisions of the customs legislation and the relevant provisions of law.

9. Acts of importing or exporting gifts in contravention of the State regulations on import and export as stipulated in Clause 2, Article 9a are acts of import or export in form of gifts those goods and/or articles which are regulated by quotas, permits or orientation plans, temporarily suspended from export and/or import or banned from export or import.

Where the import-export gifts exceed the norms set by the State as stated in the customs declarations, are goods encouraged for import or export, not regulated by quotas or orientation plans or are not conditional goods, sanctions shall not apply; however, the importer or exporter of such goods shall have to fulfill his/her financial obligations as prescribed by law.

If after customs examination, a gift beneficiary refuses to receive gift(s), such gift(s) shall be allowed to be brought out of Vietnam (except for narcotics, counter-revolutionary printed matters, weapons, ammunitions, explosives or military technical equipment).

10. For cases of importing or exporting baggage without customs declaration or with declaration at variance with the customs regulations (as provided for in the customs declaration form), which fall outside the provisions of Clause 2, Article 9b, the sanctioning shall be effected according to Clause 1 of this Article.

In cases where the import-export baggage exceeds the State�s prescriptions, which, however, have been declared to the customs as goods encouraged for import or export, such baggage shall be dealt with under the provisions of Point 9, Part II of this Circular.

The import or export of cultural products which are neither gifts nor baggage shall be handled in accordance with the provisions of Article 12, Decree No.88-CP of December 14, 1995 of the Government defining sanctions against administrative violations in cultural and cultural service activities and in the prevention and combat against a number of social evils.

Where the import or export gifts and/or baggage are goods banned from import or export (except for narcotics, counter-revolutionary printed matters, weapons, ammunitions, explosives and military technical equipment) which have been declared to the customs, such import or export shall not be allowed and the sanctioning shall not be effected.

11. Transport means carrying import-export goods in transit or across the border as stipulated in the Decree shall include air, sea, river and land transport means that move within the areas under customs control;

11.1. Acts of violation defined in Clause 2 of Article 11 shall cover also transport means that carry export goods and depart from a Vietnam port or that carry goods across the border and call on unspecified ports without declaring in advance to the customs agencies as stipulated in Clause 1, Article 3 of the Regulation on customs procedures and customs fees issued together with Decree No.171/HDBT.

11.2. Goods and/or articles which have not been declared to the customs and are carried by transport means on entry into or exit from the areas under customs control and which do not belong to the crew�s ownership shall be dealt with in accordance with the provisions of Point a, Clause 4, Article 11 of the Decree. In cases where the offenders are drivers of the means or servicemen on board or passengers on entry or exit, the sanctioning shall be effected according to Article 9b of the Decree.

11.3. If it is found that goods and/or articles are illegal imports in transit or imported for re-export and are consumed on the Vietnamese market, sanctioning shall be effected in accordance with Point b, Clause 4, Article 11 and Clause 2, Article 17 of the Decree.

12. For violations of provisions of Article 12a of the Decree:

12.1. Violations of the provisions of Point a, Clause 2; Points b and c, Clause 3 of Article 12a, which lead to failure in tax collection, shall be handled as follows:

- If there are enough legal grounds to affirm that there is an act of tax evasion as defined in Article 169 of the Penal Code and the hidden or evaded tax amount is less than VND 50,000,000 dong, but such act has been administratively handled or the offender has been sentenced for tax evasion but the sentence has not been written off; or if the evaded tax amount is VND 50,000,000 dong or more, the Director of the concerned provincial/municipal Customs Department shall not order any administrative sanction but transfer the dossiers to the investigation agency for handling according to the latter�s competence. Where there are not enough grounds to conclude on a tax-evasion offense, the violation shall, depending on its nature and seriousness, be sanctioned in accordance with the provisions of the Law on Import- Export Taxes.

- If there are not enough grounds to determine whether an act of violation leads to the failure of import-export taxes, the violation shall, depending on its nature and seriousness, be sanctioned in accordance with Clause 2 or Clause 3, Article 12a of the Decree.

12.2. For acts of refusing to receive tax notices and/or decisions on sanctioning administrative violations under the Law on Import- Export Taxes; delaying or dragging the payment of taxes or fines, they shall be recorded in writing for sanctioning under the provisions in Clause 1, Article 4 of Decree No.22-CP on sanctioning administrative violations in the field of taxation.

12.3. Where goods are imported for capital contribution to an investment joint venture with a declared value higher than the actual value, if it is determined that the relevant papers have been falsified for capital contribution increase, sanction(s) shall be imposed not only on the act of untruthful declaration of the goods� value, but also on the act of falsifying papers; if there is any sign of crime, the dossier shall be transferred to the investigation agency.

12.4. Where the goods and/or articles� names are declared inaccurately in Vietnamese compared with their English names in the documents of the customs dossiers and in the relevant technical dossiers (if any), due to the translation, such names must be re-translated accurately and a sanction shall not apply.

13. For acts of violation related to permits and documents used as permit substitutes:

13.1. Expired permits:

a/ For export goods: The goods owner shall have to apply for permit extension before filling the export procedures and at the same time shall be sanctioned under provisions of Clause 1, Article 14 of Decree No.01-CP on sanctioning administrative violations in the field of trade;

b/ For import goods: If, when the contract is signed or when the goods are loaded on transport means, the import permit is still valid but when the goods arrive at port, the permit or contract expires, a sanction for the act of using an already expired permit for the import of goods shall apply according to Clause 1, Article 14 of Decree No.01-CP on sanctioning administrative violations in the field of trade and the case shall not be considered as illegal import.

13.2. Where the import goods vary with the permit�s contents but material evidences of the violation are goods encouraged for import, not subject to tax or are materials and/or machinery to be contributed to a joint venture, which are of advanced technologies, meet the utility requirements, have been certified by the competent State management agency and already declared to the customs, sanctioning shall not be effected but the importer shall have to fulfill all financial obligations as prescribed by law.

13.3. Where the import or export fails to comply with the permit�s contents or without a permit other than that used for direct import or export, such as a business-line trading permit; import-export business permit; permit for the import of production lines for investment capital contribution under the Investment Law; cross-border business permit or permit for business by the mode of temporary import for re-export or for duty-free shop business, etc., the sanctions shall apply in accordance with Articles 15, 16, 17 and 19 of Decree No. 01-CP.

13.4. Where the import fails to comply with the customs declaration and the goods receiver refuses such goods and give them back to the seller with plausible reasons in conformity with the Commercial Law and other provisions of Vietnamese law as well as international commercial practices and if there are no signs of legalizing a lot of smuggled goods, such goods shall be dealt with under the provisions of Clause 3, Article 12a of the Decree and shall be forcibly brought out of Vietnam.

Where the import goods and/or articles comply with the customs declaration (being not goods and/or articles banned from import or export) but the receiver refuses the goods and give them back to the seller, the goods shall be allowed to be brought out of Vietnam without being subject to a sanction but put under close inspection.

13.5. Where the import/export goods and/or articles fail to comply with the customs declaration but this does not change the tax amount and the importer�s/exporter�s financial obligations, commodity policy, environmental hygiene or common technical norms, the sanctions shall not apply, unless otherwise provided for by law.

14. Where the actually imported/exported goods and/or articles comply with the customs declaration but the tax codes are applied wrongly for the first time, the customs agency shall direct the importer/exporter to apply the codes correctly and shall not impose any sanction. If, though having been guided for tax code application, the importer/exporter still fails to correctly apply the codes, he/she shall be sanctioned in accordance with Point b, Clause 3 of Article 12a.

15. Regarding the provisions in Point d, Clause 8 of Article 12a, the provincial/municipal Customs Director shall have to fully and promptly report to the General Director of Customs for decision to clear the goods or authorize the provincial/municipal Customs Director to clear the goods.

16. The provisions in Points e and g, Clause 5 of Article 12a of the Decree shall not apply to cases where goods and/or articles are brought into Vietnam on the basis of trade contracts and in conformity with the importer�s business permit, provided that such importer has produced the permit within the time-limit stipulated in Clause 1, Article 3 of the detailed regulation on the customs procedures and customs fees issued together with Decree No. 171-HDBT.

17. Diplomats and consuls who abuse diplomatic immunity to conduct business activities beyond their official functional scope, thus committing administrative violations in customs shall be sanctioned only after the diplomatic authorities have been consulted in this regard.

Persons who are not entitled to diplomatic immunity but abuse such immunity to avoid customs inspection in order to illegally import or export goods, evade taxes or falsify papers for importing goods with preferential treatment under the customs immunities but not to the extent of being examined for penal liability shall be sanctioned according to Point a, Clause 5, Article 12a of the Decree.

18. Violations of the regulations on foreign exchange import or export:

a/ All acts of untruthful declaration of foreign exchange which exceeds 5,000,000 VND shall be sanctioned;

b/ For acts of violation of Clause 4, Article 13 of the Decree, where the untruthfully declared foreign exchange is up to 100,000,000 dong or more, and there are aggravating factors, they shall, depending on their nature and seriousness, be sanctioned as administrative violations or examined for penal liability;

c/ For cases of illegal import or export of foreign exchange and deliberate concealment in order to avoid customs inspection, in addition to the fines stipulated in Clauses 1, 2, 5 and 6, Article 13 of the Decree, the material evidences of the violation shall be confiscated for the public fund, except for the foreign exchange exempt from customs declaration as prescribed by law.

19. Violations of the regulations on import or export of Vietnamese currency:

a/ Violations of Clause 1, Article 14 of the Decree without aggravating factors and with material evidences of the violation valued at less than 10,000,000 dong shall be subject to warnings.

b/ Violations of Clauses 1, 2 and 3, Article 14 upon the export shall lead not only to fines but also to the suspension of export;

c/ Violations of Clauses 1, 2 and 3, Article 14 with deliberate concealment to avoid customs inspection shall lead not only to fines, but also to the confiscation of the material evidences and means of the violation for the public fund.

III. SANCTIONING COMPETENCE

1. The immediate superiors of customs personnel, including the chiefs of the border-gate work teams and professional sections, to be appointed by the Directors of Customs of the provinces and centrally-run cities (hereafter referred collectively to as the provincial Customs Department); and the other professional sections where the teams are not set up, shall exercise their sanctioning competence under provisions of Clause 1, Article 16 of the Decree. The immediate superiors of the chiefs of work teams shall have to examine and request their personnel to strictly observe the provisions of law when issuing sanctioning decisions. Where the violators are foreigners or where the violations involve complicated factors, the dossiers shall be forwarded to the immediate superiors for the issue of sanctioning decisions.

2. The chiefs of the border-gate customs station, the chief of the inspection team of the provincial Customs Department; and the chief of the inspection team of the Department for Investigation against Illicit Trade shall exercise their sanctioning competence as provided for in Clause 2, Article 16 of the Decree.

Decisions on fines of up to 2,000,000 dong and confiscation of material evidences and instruments valued at 5,000,000 dong or more, must be sent by the above-said competent persons to the provincial Customs Director or the Head of the Department for Investigation against Illicit Trade (if the decision is made by an inspection team attached to the Department for Investigation against Illicit Trade) so that the latter forward them to the People�s Procuracy of the province or centrally-run city where the provincial Customs Department is located.

For acts of violation subject to fines of more than 2,000,000 dong or to the confiscation of material evidences valued at over 20,000,000 dong, the chief of the border-gate customs station, the chief of the inspection team attached to the provincial Customs Department shall have to make reports and forward the dossiers as well as material evidences of violation to the provincial Customs Director for the issue of sanctioning decisions.

For violations falling outside the sanctioning competence of the chief of the inspection team attached to the Department for Investigation against Illicit Trade, the head of the customs agency of the locality where the violation has been detected and recorded in writing shall be the person to receive the dossier of violation and issue the sanctioning decision.

The chief of the border-gate customs, the chief of the inspection team of the provincial Customs Department or the Department for Investigation against Illicit Trade shall have the competence to impose sanctions under the provisions of the Law on Import and Export Taxes and with the maximum fine level of 20,000,000 dong.

3. The provincial Customs Director shall exercise the sanctioning competence in accordance with the provisions of Clause 3, Article 16 of the Decree.

a/ For violations with complicated factors or which are liable to the additional sanction of confiscating violation�s material evidences valued at more than 200,000,000 dong, the provincial Customs Director shall have to send the dossiers to and consult the General Director of Customs; and shall issue the sanctioning decision only after obtaining the consent from the General Director of Customs;

b/ For violations liable to fines of more than 20,000,000 dong the dossier shall be transferred to the People�s Committee of the province or centrally-run city (hereafter referred to as the provincial People�s Committee) where the offender is arrested so that the President of the provincial People�s Committee issues the sanctioning decision. After the sanctioning decision is issued, the provincial Customs Director shall have to report to the General Director of Customs;

c/ For offenders of the customs legislation who are detected, recorded in writing and arrested by the mobile inspection team on the sea within the territorial waters, continental shelf, exclusive economic zone or other areas where customs offices have not been set up and whose sanctioning goes beyond the competence of the inspection team, they shall be brought to the nearest customs office for sanctioning in accordance with the general regulations;

d/ A dossier of customs-related administrative violation, when being transferred to the president of the provincial People�s Committee, must be attached with a brief of the case�s contents as well as the provincial Customs Director�s comments on the handling measures therefor. The transfer of dossiers of customs-related administrative violations subject to fines of more than 20,000,000 dong to the provincial People�s Committee shall have to comply with the general regulations. The time-limits for dossier consideration and settlement at each level is specified as follows:

Within 10 days after recording an administrative violation in writing, the provincial Customs Director shall have to send the dossier of violation, attached with a proposal on sanctioning measures to the president of the provincial People�s Committee for consideration; within 5 to 7 days after receiving the dossier and proposal on sanctioning measures from the Customs Director, the president of the provincial People�s Committee shall issue the sanctioning decision. All material evidences of the violation must be retained in the customs� warehouse for preservation. The material evidences which are foreign exchange or Vietnamese currency, precious metals or gems, must be sealed off and deposited in the State treasury.

e/ For a dossier of administrative violation transferred by the customs agency to the president of the provincial People�s Committee for settlement according to the latter�s competence, after the president of the provincial People�s Committee has issued the sanctioning decision, such decision must be enforced by the Customs Director who first receives the dossier of administrative violation for settlement. Every month, the Customs Director shall have to report to the General Director of Customs on the results of the enforcement of sanctioning decisions issued by the president of the provincial People�s Committee;

f/ Where a Customs Department is in charge of more than one provinces, dossiers of customs-related administrative violations shall be transferred to the presidents of the People�s Committees of the provinces where the violators are arrested, for the issue of sanctioning decisions, if the settlement of such dossiers is beyond the sanctioning competence of the provincial Customs Director;

g/ The provincial Customs Director�s sanctioning competence under the Law on Import and Export Taxes shall be effected in accordance with the provisions of this Law and relevant sub-law documents. For hidden evaded tax amounts below the level liable to examination for penal liability as stipulated in Circular No.06/TTLB of September 20, 1996 of the Supreme People�s Procuracy, the Supreme People�s Court and the Ministry of the Interior guiding the handling of tax evasion offenses, the provincial Customs Director shall have the right to impose a fine 5 times higher than the evaded tax amount, but the value of the one-time fine on a tax evasion must be less than 50 million dong and the value of the 5-time fine on such tax evasion must be less than 250 million dong.

Where the fine amount exceeds the above-said level, the provincial Customs Director shall issue a sanctioning decision under the Law on Import and Export Taxes only after obtaining a decision on non-examination for penal liability from the investigation agency. After issuing the sanctioning decision, the provincial Customs Director shall have to report thereon to the General Director of Customs.

IV. IMPLEMENTATION OF MEASURES TO PREVENT ADMINISTRATIVE VIOLATIONS AND ENSURE THE SANCTIONING THEREOF

1. When the temporary detention of offenders in accordance with administrative procedures is applied, the following principles must be observed:

a/ Only the competent persons defined in Article 19 of the Decree shall have the right to detain offenders in accordance with administrative procedures;

b/ The temporary detention of offenders shall be effected only with a written decision, a copy of which must be given to the detained;

c/ The temporary detention of offenders in accordance with administrative procedures shall apply only when it is necessary for gathering and verifying important details to serve as basis for the issuance of a sanctioning decision or for the immediate prevention and suspension of administrative violations.

2. Temporary seizure of material evidences and instruments of administrative violations

a/ When an act of administrative violation in the field of State management over customs is detected, it must immediately be recorded in writing and the violation shall be considered for application of the temporary seizure of material evidences; the temporary seizure of material evidences shall apply only when the violation is determined as liable to such form of additional sanction as confiscation of material evidences for the public fund or when the value of material evidences is equal to the fine level imposed on the violation so as to ensure the implementation of the sanctioning decision. Where it is unclear whether the violation has happened or not, only a sample of the material evidences shall be kept. For material evidences which are foreign exchange of passengers on entry or exit, only the foreign exchange amount exceeding the norms set by the State Bank of Vietnam shall be temporarily seized. For material evidences which are raw materials for the sub-contracted production of goods or for goods production for export, goods for capital contribution to joint ventures, duty-free goods imported with ODA capital or goods deposited in bonded warehouses, as stated in the permit and/or contract, only samples of such raw materials or goods are kept, the goods then shall be liberalized but their owner shall have to make a written commitment to implement the sanctioning decision later.

When performing the temporary seizure of material evidences, it is necessary to comply with the regulations on time-limits for the temporary seizure and handling of material evidences and instruments of violation as stipulated in Clause 5, Article 41 of the Ordinance on the Handling of Administrative Violations.

If organizations and/or individuals fail to strictly comply with the regulations on the temporary seizure of materials evidences and instruments of violation, thus causing material damage to the goods owners, the local Customs Directors, the immediate superiors of the persons issuing temporary-seizure decisions or the authorized persons of the customs agencies shall have to settle compensation for material damage for the goods owners according to Articles 7, 8, 9, 10 and 11 of Decree No. 47-CP of May 3, 1997 on the settlement of compensation for damage caused by State officials and employees and competent persons of legal proceedings agencies. The level of compensation to be paid by the person competent to order the temporary seizure shall be determined according to Articles 12, 13, 14, 15, 16, 17 and 18 of Decree No.47-CP;

b/ The persons competent to order the temporary detention of offenders in accordance with administrative procedures shall also have the right to order the temporary seizure of material evidences and instruments of violation in accordance with administrative procedures.

c/ The chief of a work team shall be entitled to order the temporary seizure of material evidences and instruments of administrative violations only in cases when an offender is caught in the act and temporary seizure must apply so that material evidences and instruments of violation cannot be dispersed or changed for the wipe-off of traces. However, within no more than 24 hours after deciding the temporary seizure, the decision-issuing person shall have to report it to his/her immediate superior in accordance with the provisions of Article 19 of the Decree and must obtain a written consent therefrom;

d/ To ensure the timely and efficient prevention of administrative violations, the provincial Customs Director may mandate the Head of the Department for Investigation against Illicit Trade to temporarily seize material evidences and instruments of administrative violations. Both the mandator and the mandatary shall have to take material responsibility for their decisions.

3. Body search in accordance with administrative procedures

a/ The competence and order for body search in accordance with administrative procedures shall be effected under the provisions of Article 21 of the Decree.

b/ Customs personnel on duty shall have the right to conduct a body search in accordance with administrative procedures. Before conducting a body search, they shall have to show to the object of the search their customs identity cards, take responsibility before law for their decision and truthfully report to their immediate superior.

4. Searching transport means and objects in accordance with administrative procedures

a/ Customs personnel on duty shall have the right to search transport means and/or other objects in accordance with administrative procedures, except when the transport means is a Vietnamese or foreign sea-going vessel, airplane or train which is operating on international routes and where a decision from the chief of the border-gate customs station or officer of equivalent or higher level is required;

b/ The search of transport means and/or other objects of the persons who enjoy diplomatic immunity must be conducted in accordance with the provisions of international agreements which Vietnam has signed or acceded to and by decision of the General Director of Customs.

Where there are grounds to affirm that luggage of persons entitled to diplomatic or consul immunity on entry or exit contain objects not eligible for such immunity; objects banned from import or export by the State of Vietnam or objects which fail to comply with the Vietnamese regulations on quarantine, a search shall be conducted by decision of the General Director of Customs, in the presence of the concerned diplomat or his/her authorized representative.

3. Searching places of concealment of material evidences and instruments of administrative violations

If the search of a place of concealment of material evidences and instruments of an administrative violation within the area under customs control is deemed unnecessary, the customs agency shall have to coordinate with the competent agencies to conduct the search under the provisions of Article 44 of the Ordinance on the Handling of Administrative Violations.

V. PROCEDURES FOR SANCTIONING ADMINISTRATIVE VIOLATIONS AND IMPLEMENTATION OF DECISIONS ON ADMINISTRATIVE SANCTIONS

1. When sanctioning an administrative violation in the field of State management over customs in the form of warning or a fine of up to 20,000 dong, a written record of the violation shall not be made and the sanctioning decision shall be issued on the spot.

2. A decision on sanctioning an administrative violation may include its effective date (such as where the sanctions are imposed on absent foreigners; or due to the lack of time, space or other reasons, a decision cannot be implemented within 5 days after it is received).

3. Where a fine is applied independently or together with the confiscation of material evidences and instruments of violation but after the time-limit for the implementation of the sanctioning decision the offender still fails to pay the fine, coercive measures shall apply.

Basing him/herself on Point a, Clause 3, Article 30 of the Ordinance on the Handling of Administrative Violations, the provincial Customs Director shall have the right to force the implementation of sanctioning decisions by ordering the suspension of the filling of customs procedures for import/export goods and/or articles, but only after unsuccessful application of other coercive measures in coordination with the agencies stipulated in Article 30 of the Decree and the offender still deliberately does not implement the sanctioning decision.

VI. SETTLEMENT OF COMPLAINTS

1. Complaints against the application of measures to prevent administrative violations.

a/ Individuals and/or organizations subject to measures for the prevention of administrative violations such as temporary detention of offenders; temporary seizure of material evidences and instruments of violations; body search; searching transport means and/or other objects in accordance with administrative procedures as stipulated in Articles 18, 19, 20, 21 and 22 of the Decree, shall have the right, on their own initiative or through their legitimate representatives, complain to the immediate superiors of the persons who have issued decisions on the application of preventive measures;

b/ A complaint must be settled within 5 days after it is received by a decision to maintain the preventive measures already applied, change them or annul part or all of such measures.

2. Complaints against decisions on sanctioning customs-related administrative violations.

- The person competent to issue a decision on sanctioning a customs-related administrative violation shall have to settle a complaint thereon for the first time.

For decisions issued by the chief of the work team, the chief of the professional section or the chief of the border-gate custom station shall settle complaints thereon for the second time.

For sanctioning decisions issued by the chief of the customs border-gate station, the chief of the customs inspection team or the chief of the professional section ( where a team is not set up), the competence for settling complaints thereon for the second time shall be vested in the provincial Customs Director or the Head of the Department for Investigation against Illicit Trade.

For sanctioning decisions issued by the provincial/municipal Customs Director, the competence for settling complaints thereon shall be vested in the General Director of Customs.

The General Director of Customs shall settle for the second time complaints against sanctioning decisions issued by the president of the provincial People�s Committee; if the president of the provincial People�s Committee agrees with the decision of the General Director of Customs, he/she shall make another decision amending his/her first-issued decision. Where the president of the provincial People�s Committee disagrees with the decision of the General Director of Customs, he/she shall have the right to complain thereabout to the State Inspector- General.

All complaints against decisions on sanctioning administrative violations in the field of State management over customs shall be settled in accordance with the Ordinance on the Handling of Administrative Violations, Articles 31, 32 of the Decree as well as the Ordinance on the Settlement of Administrative Lawsuits. If the complainants disagree with the settling decisions of the competent persons, they shall have the right to complain to the immediate superiors of such persons or initiate administrative lawsuits at the competent courts. In cases where a complaint is lodged to the immediate superior (of the person competent to settle the complaint) and an administrative lawsuit is initiated at the same time, the provisions of Article 13 of the Ordinance on Procedures for the Settlement of Administrative Lawsuits shall apply.

3. When settling complaints against decisions on administrative sanctions, the competent persons shall have to base themselves on Clause 3, Article 88 of the Ordinance on the Handling of Administrative Violations and the sample stamp HC20 to issue complaint-settling decisions.

VII. ORGANIZATION OF IMPLEMENTATION

1. The Legal Department of the General Department of Customs shall have to organize, in coordination with the relevant departments attached to the General Department of Customs, the re-examination of decisions on customs-related administrative sanctions and inspect the observance of law in the course of sanctioning violations so as to ensure that the sanctioning of customs-related administrative violations strictly comply with the provisions of law.

2. The provincial Customs Directors shall organize the close inspection of implementation of the principles and order for sanctioning administrative violations (provided for in the Ordinance on the Handling of Administrative Violations and the Regulation on the order for sanctioning administrative violations in customs, issued together with Decision No.97/TCHQ-PC of August 5, 1996 and Official Dispatch No. 2505/TCHQ-PC of August 6, 1996 guiding the implementation thereof) by their attached units.

The border-gate customs stations, the inspection teams attached to the provincial Customs Departments and the specialized sections shall have to nominate specialized persons in charge of supervising and guiding the inspection of the sanctioning of administrative violations by the work teams; promptly settling complaints about measures to prevent administrative violations and against decisions on administrative sanctions according to the Decree and guidances of this Circular.

3. For administrative violations or complaints against decisions on administrative sanctions involving complicated factors, the consulting councils for handling at different levels shall take responsibility for the study and consideration thereof so as to propose the General Director of Customs to issue timely and appropriate decisions thereon.

4. The personnel in charge of monitoring and guiding the sanctioning of administrative violations must be selected from those who have been well trained, are honest and have good knowledge about law and professional matters.

5. The collection and remittance of fines on administrative violations shall comply with guidances of the Ministry of Finance. The Head of the Department for Inspection of Import-Export Tax Collection under the General Department of Customs shall have to inspect and provide detailed guidance on the regime of collection and remittance in accordance with current provisions of law.

6. Customs personnel and officers who have competence to sanction or apply measures to prevent administrative violations or are tasked to sanction customs-related administrative violations and who commit acts of breaching the principles and order for sanctioning administrative violations prescribed by law or who lack responsibility, hassle the offenders or act for egoistic motives shall, depending on the seriousness of their violations, be strictly handled in accordance with the provisions of law; if they cause material losses to individuals and/or organizations, they shall have to pay compensation as prescribed by law.

This Circular shall take effect 15 days after its signing and replaces Circular No. 242/1997/TT-TCHQ of October 14, 2997, Circular No. 01/1998/TT-TCHQ of May 6, 1998 and other documents earlier issued by the General Department of Customs which are contrary to this Circular.

General Director of Customs

PHAN VAN DINH